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Economics Bank System MCQS
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1. Profit and loss-sharing is an element of this system:
Islamic
Capitalistic
Socialistic
None of these
2. Cash cannot be obtained from bank against:
Cross cheque
Order cheque
Bearer cheque
Traveller cheque
3. Commercial banks accept deposits and provide:
Money
Cheque
Loans
Bill of exchange
4. The banks can give loans:
Unlimited
Equal to deposits
Less than deposits
More than deposits
5. Banks discount it and advance loans:
Draft
Bill of exchange
Pay order
Good
6. Banks prepare their balance sheet:
Weekly
Monthly
Quarterly
Annually
7. Balance sheet of a bank has two parts:
Supply and demand for deposits
Supply and demand of advances
Assets and liabilities
Cash reserves and loans
8. When banks prepare their balance sheets they show the money lent in:
Liabilities
Assets
Both assets and liabilities
None of these
9. The power of a bank to create credit is affected by:
The cash reserve requirement
The amount of cash available
The number of branches of a bank
Both (a) & (b)
10. Demand deposits are:
Bank notes
Money (they can be used to make payments)
Considered as near money
Legal money
11. An asset is liquid when it is:
Being traded frequently
Earning a good rate of return
Is money or easily converted into money
All of the above
12. A bank has Rs. 5 million in cash. The minimum reserve ratio is 20%. What is maximum potential increase in total deposits:
0
5 m
10 m
25 m
13. The following is not a bank liability:
Demand deposit
Time deposit
Saving deposit
Loans
14. When a commercial bank creates credit it immediately raises:
Its assets
Its liabilities
Money supply
(a) and (b) of above
15. Which is the source of interest for a bank:
Advances
Bills discounted
Investments
All of the above
16. Commercial banks are able to create money by:
Printing money
Making loans
Moral suasion
Selling government bonds
17. Which is a function of a commercial bank:
Acting as a govt. banker
Fixing the exchange rate
Issuing bank notes
Making loans
18. When a commercial bank creates credit its immediate effect is that it raises:
The exchange rate
The interest rate
The money supply
The real national income
19. Total number of bank branches in Pakistan is:
More than 5000 but less than 10000
More than 10000 but less than 15000
More than 15000 but less than 20000
More than 20000 but less than 25000
20. Demand deposits mean:
Saving account
Profit loss account
Chequeable deposits
Time deposits
21. Which is considered liability by a bank:
Loans
Bank s building and equipment
Time deposit
Securities
22. Demand deposits are money because:
They are backed by gold
They are assets of banks
They can be used to make payments
All of the above
23. Credit money is created by:
Central bank
Commercial bank
Government
All of the above
24. Credit money is created by:
Exchange bank
Commercial bank
Finance companies
None of these
25. Select the correct statement:
Credit money is better than legal money
Legal money is better than credit money
Both legal money and credit money are equally useful
All money is evi
26. Select the correct statement:
Central bank creates legal money
Commercial bank create paper money
Finance companies create fake money
None of the above is true
27. Select the correct statement:
Central bank creates convertible money
Commercial bank create convertible money
Govt. creates paper money
None of the above is true
28. Which type of cheque is more safe for transfer of money
Bearer cheque
Traveller cheque
Order cheque
Cross cheque
29. Which type of cheque is least safe for transfer of money:
Bearer cheque
Traveller cheque
Order cheque
Cross cheque
30. If a person is more interested to earn income he should deposit his money in:
Demand deposit
Time deposit
Saving account
Profit-loss account
31. If a person is interested that his amount should be readily available as soon as he needs he should deposit his money in:
Demand deposit
Time deposit
Saving account
Profit-loss account
32. Which type of card is not issued by commercial banks:
Credit card
Debit card
ATM card
Green card
33. Which type of card is not issued by central banks:
Credit card
Debit card
ATM card
None is issued y it
34. Market rate of interest is:
Always higher than discount rate
Always lower than discount rate
Both are equal
May be higher or lower than discount rate
35. Most important source of income of commercial banks is:
Interest charged on loans
Profit erned on investments
Income from collecting utility bills
Income from reserves at central bank
36. Select the true statement:
The central bank charges high interest rate on loans to commercial banks
The central bank does not charge interest on loans to banks
The central bank does not advance loans to commercial banks
None is true
37. If you borrow from a bank the amount which the bank charges is called:
Bank rate
Discount rate
Interest rate
Borrowing rate
38. The rate charged by a central bank on loans is called:
Market rate
Discount rate
Lending rate
Tax rate
39. Changes in discount rate are brought about by State Bank to:
Control inflation
Increase investment activity
Increase earnings of the bank
(a) and (b) of above
40. Short term loans can be obtained in:
Stock market
Money market
Capital market
All the markets
41. Long term loans can be obtained in:
Stock market
Money market
Capital market
Exchange market
42. Functions of commercial bank are:
Issue currency create deposit money and provide loans
Accept deposit create deposit money and provide loans
Accept deposit provide loans export goods
Accept deposit provide loans and control foreign exchange
43. This is a difficulty of barter:
Lack of double coincidence of wants
Difficulty to use larger scale in production
Lack of divisibility of many goods
All of the above
44. Velocity of circulation of money means:
Total demand for money
Total supply of money
The average number of times a unit of money changes hands
Annual increase in currency notes
45. Nationalisation of banks ws done in:
1974
1976
1978
1980
46. National Bank of Pakistan is:
Industrial bank
Commercial bank
Central bank
Investment bank
47. Total number of branches of Pakistani banks is approximately:
3000
9000
15000
21500
48. National Bank of Pakistan was established in:
1949
1959
1969
1970
49. The bank established for loans to very small enterprises is called:
Micro Finance Bank
Modarba Bank
SME Bank
First Mini Bank
50. Pakistan has a banking system:
Developed
Underdeveloped
Very unorganised
(a) and (c) of above
51. Commercial banks in Pakistan are supervised by:
State Bank
National Bank
Finance Minister
World Bank
52. National Bank is a:
Public sector bank
Private bank
Micro finance bank
Specialised bank
53. First Women bank is:
Private bank
Govt. Bank
Non-Scheduled Bank
Investment Bank
54. Bank rate in Pakistan is:
3%
13%
23%
33%
55. State Bank was established in:
1948
1950
1952
1954
56. 10-rupee note is issued by:
National Bank
State Bank
Govt. of Pakistan
Governor State Bank
57. Acting as lender of last resort a central bank lends to:
Money markets
Stock exchange
Commercial banks
Does not lend
58. Which statement is true of the relationship between bond prices and bond yields?
They vary inversely
They tool vary directly
They are not related
They are related in long run and not in the short run
59. Which is the most widely used of monetary policy:
Clearing house
Open-market operations
Discount rate
Issuing of notes
60. When the State Bank wants to decrease money supply in the country it:
Buys govt. securities in stock market
Sells govt. securities
Lowers discount rate
(b) and (c) of above
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